Health care for millions advances

Two bills would aid state's uninsured.

By Jim Sanders - Bee Capitol Bureau
Published 12:00 am PDT Friday, June 8, 2007

Setting the stage for fireworks, Democrats in each house of the Legislature passed separate bills Thursday to guarantee medical care for millions of uninsured Californians.

"We now have a target for people to shoot at," Senate President Pro Tem Don Perata said at a news conference shortly after passage of his Senate Bill 48 and of Assembly Bill 8.

Backers hailed the measures as critical to improving the quality of life for uninsured Californians ranging from low-wage workers to single parents to children who entered the state illegally.

"We're going to say, to all Californians, from this point forward, that health care is a right afforded to everyone in this state," Assembly Speaker Fabian Núñez said.

Hundreds of bills were acted upon this week by Assembly and Senate members, who adjourned Thursday, a day before the deadline for deciding measures proposed in their legislative house.

Republicans lambasted the Democratic health care bills as the largest "tax increase" in state history, totaling more than $5 billion.

Steve Maviglio, Núñez's spokesman, countered that the measures call for a fee, not a tax, an important legal distinction.

Assemblyman Sam Blakeslee, R-San Luis Obispo, characterized the Democratic proposals as wrong-way leadership.

"We'll take a step backward," he said.

The two health care bills, opposed by the GOP, passed on votes of 47-32 for Núñez's bill, AB 8, and 23-16 on Perata's proposal, SB 48.

The two Democratic leaders characterized their proposals as very similar.

Thursday's action sets the stage for negotiations that will involve hospital, doctor, nurse, business, insurance, consumer, labor union and low-income advocacy groups that are among the Capitol's most powerful players.

Gov. Arnold Schwarzenegger, through a spokeswoman, applauded Thursday's votes but said "this is just a starting point for negotiations -- everything's on the table."

"The governor has said all along that he doesn't care who gets credit as long as we fix our broken health care system," spokeswoman Sabrina Lockhart said.

Núñez, Perata and Schwarzenegger are all committed to insuring most or all of the 6.5 million people who lack health insurance at some point during the year. Nearly 5 million lack coverage consistently.

Much of the fight is over who should pay -- and how much.

Núñez, Perata and Schwarzenegger basically agree on requiring employers to help foot the bill, creating a state-run insurance pool, mandating that insurance companies cover anyone who applies, and forcing insurers to spend a larger share of premiums on medical care.

The two Democratic bills propose a "pay-or-play" system that would require employers to spend 7.5 percent of their payroll on health care or pay into a state fund that would provide comprehensive coverage.

Workers served by the state pool would pay some of the insurance premium -- Perata's bill limits such costs to 5 percent of income, while Núñez's measure does not specify a cap.

Núñez's plan, unlike Perata's, would exempt from the employer mandate businesses that have been operating for three years or less, employ fewer than two people, or have an annual payroll of less than $100,000.

Under SB 48, working Californians and their dependents with family incomes above 400 percent of the federal poverty level -- about $62,000 for a family of three -- would be required to have a minimum health coverage policy.

Núñez's proposal, AB 8, does not mandate that families earning more than a certain amount obtain health insurance. Low-income families earning below 300 percent of the federal poverty level -- about $50,000 for a family of three -- would be eligible for subsidized coverage.

GOP proposals, killed in legislative committees, relied more on market incentives and less on government intervention.

"We both want better (care) for all Californians," said Assemblyman John Benoit, R-Palm Desert. "But we don't always feel that bigger government is the way to get there."

Opponents of the Democratic bills claim that charging employers a mandatory fee could drive businesses out of California while doing nothing to stem soaring health care costs.

"Employer mandates threaten jobs and slow economic growth," the California Chamber of Commerce said in a letter to lawmakers this month.

Assemblyman Todd Spitzer, R-Orange, said the 7.5 percent assessment on businesses is an illegal mandate under federal law and could be overturned if challenged in court.

Anthony Wright, director of Health Access California, a statewide health care consumer advocacy coalition, applauded Thursday's votes.

"But more needs to be done to guarantee that coverage will be affordable for consumers," he said.

Schwarzenegger has favored a broader sharing of the financial pain. The GOP governor's plan, unlike those of Núñez and Perata, would require every Californian to have at least a bare-bones insurance policy to protect against catastrophic illness or injury. Premiums for subsidized coverage would be based on family size and income.

Schwarzenegger would assess a 4 percent payroll charge on employers with at least 10 workers if they do not provide health insurance. His plan also calls for a 2 percent charge on doctors and a 4 percent fee on hospitals.

Schwarzenegger's plan would ensure health coverage for everyone, while each Democratic plan would cover about 70 percent of the uninsured.

All three are counting on leveraging federal funds with state money to expand public health programs.

Two other key measures cleared legislative hurdles.

Assembly Bill 1554, by Assemblyman Dave Jones, D-Sacramento, would require health plans and health insurers to submit proposed rate increases for annual approval.

The Assembly passed the bill Thursday, 43-33.

Senate Bill 840, by Sen. Sheila Kuehl, D-Santa Monica, would replace private medical insurance with a state-run system to guarantee care for every resident. The Senate passed the bill Wednesday, 23-15.


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